Stimulus Includes $3.4B for IT Infrastructure

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The Obama administration’s economic stimulus package includes approximately $3.4 billion in spending for IT projects, including heavy investment in electronic health records and infrastructure upgrades for the departments of Homeland Security, State, Veterans Affairs, and Health and Human Services.  

The stimulus plan includes $50 million earmarked for Department of Energy research into energy efficiency and renewable energy in IT and communications. The appropriation for the Office of Efficiency and Renewable Energy (EERE) is part of $16.8 billion in funding the DOE received in the American Recovery and Reinvestment Act, which President Obama signed into law on Tuesday.

The EERE funding is among the most direct benefits for the data center industry, along with $500 million earmarked for a new data center for the Social Security Administration. But the 400-page stimulus package dedicates an additional $2.8 billion to a broad range of investments in IT equipment, infrastructure and security. 

The stimulus is good news for universities and national labs that are examining data center power usage and potential applications of renewable energy in the sector. The energy issues in the IT and telecom industries are broad, but the enormous power usage of data centers is likely to make these facilities a key focus of the EERE research agenda. The Lawrence Berkeley National Laboratory (LBNL) has been a leader in data center energy efficiency research, including the 2007 study on the industry’s power consumption. The new DOE Secretary of Energy is Prof. Steven Chu, a Nobel Price winning physicist and former director of the LBNL.

The largest portion of the IT investment in the stimulus package targets the modernization of health records and migrating doctors’ offices and hospitals to electronic health records. This includes:

  • $1.5 billion for grants to construct, renovate and acquire health information technology systems.
  • $300 million to support regional efforts to etablish health information exchanges.
  • $50 million to improve information technology security at the Department of Health and Human Services, an essential step in securing personal data.
  • $20 million for the Department of Commerce and NIST to work on developing technical standards and conformance testing for electronic health records.

There is also funding set aside to improve the IT infrastructure and security of specific departments of the federal and state governments. Here’s the rundown:

  • $500 million to build a new data center for the Social Security Administration to replace its 30-year old National Computer Center in Maryland.
  • $290 million for a “Capital Investment Fund” for the Department of State to beef up its IT security and mission-critical operations, with $38 million of that earmarked for the Agency for International Development.
  • $250 million to upgrade IT infrastructure for unemployment insurance programs to meet the needs of claimants, addressing lengthy delays and failures of state phone and web systems for filing benefits claims.
  • $200 million for the Department of Homeland Security to consolidate IT infrastructure for the Office of the Under Secretary for Management of DHS.
  • $85 million to develop telehealth programs and infrastructure to provide remote medical services through  the Indian Health Service.
  • $50 million for modernizing and maintaining IT systems for the Farm Service Agency.
  • $50 million to upgrade IT systems for the Veterans Benefits Administration.
  • $40 million for the Commissioner of Social Security to adopt electronic medical records in disability claims.
  • $20 million for automating information technology supporting the Small Busines Administration’s lending programs.

The bottom line: the stimulus will create plenty of opportunity for IT equipment vendors, service providers and systems integrators in the next several years.

About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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